ADB raises share of project funding<\/p>\n
P. Parameswaran, Agence France-Presse, Manila<\/p>\n
The Asian Development Bank (ADB) is to substantially increase
\nits share of funding for projects in developing member countries
\nto help them tide over fiscal and other financial constraints,
\nofficials said.<\/p>\n
The Manila-based bank's funding share has been between 40 and
\n80 percent of the cost of projects since 1998.<\/p>\n
Effective Jan. 1, 2003, ADB's minimum share would rise to 65
\npercent but the ceiling would remain largely unchanged, Ann Quon,
\nthe bank's director of external relations, told AFP Thursday.<\/p>\n
\"The bottomline is that ADB is now able to provide a larger
\nproportion of project cost financing than done previously,\" she
\nsaid.<\/p>\n
Although the change applies only to new project loans, it will
\nbe a welcome relief to nearly 33 countries banking on the ADB for
\nfunding of projects ranging from micro-finance banking to sewage
\nsystems.<\/p>\n
Compared with other multilateral financial institutions, such
\nas the World Bank and the Japan Bank for International
\nCooperation, the ADB gives the smallest funding share for
\nprojects.<\/p>\n
\"The new ruling will now narrow the difference between ADB and
\nthe other multilateral financial institutions in terms of
\npercentage of project share funding,\" Quon said.<\/p>\n
In devising the change, the ADB also considered the tighter
\nfiscal situation in the region and the \"lingering\" effects of the
\nAsian financial crisis in 1997\/8 and the subsequent Russian
\nfinancial crisis, she added.<\/p>\n
Last year, ADB lent a total of $5.7 billion by taking stakes
\nin 76 projects, mostly in Asia, including in Afghanistan where it
\nresumed operations for the first time in 23 years.<\/p>\n
ADB's loan value is expected to increase substantially in 2003
\nwith its higher share in project funding.<\/p>\n
The ADB's project cost-sharing limits are based largely on a
\ncountry's per capita gross national product (GNP) and external
\ndebt repayment capacity, officials said.<\/p>\n
Under the new criteria, Quon said, ADB would shoulder 65
\npercent of project costs -- from 40 percent previously -- in the
\nPhilippines, Fiji, Kazakhstan, Malaysia, Thailand, Turkmenistan
\nand Uzbekistan.<\/p>\n
In China, India, Indonesia and Papua New Guinea, ADB's stake
\nin projects would increase from 60 percent to 70 percent.<\/p>\n
The bank's funding limit would be raised to 75 percent from 70
\npercent in Azerbaijan, Bangladesh, Marshall islands, Federated
\nStates of Micronesia, Pakistan, Sri Lanka, Tonga and Vietnam.<\/p>\n
ADB would however maintain its 80 percent funding limit in
\nAfghanistan, Bhutan, Cambodia, Kiribati, Kyrgyzstan, Laos,
\nMaldives, Mongolia, Myanmar, Nepal, Samoa, Solomon Islands,
\nTajikistan and Vanuatu.<\/p>\n
The bank's largest borrowers last year were India at about
\n$1.2 billion, Pakistan at $1.1 billion, China at $900 million and
\nIndonesia at $800 million.<\/p>\n
The ADB has 61 member economies as its shareholders, of which
\nJapan and the United States are the largest.<\/p>\n
Thomas Crouch, ADB's Philippine country director, said the
\nbank's new ruling on project cost-sharing limits was in line with
\nits emphasis on social development.<\/p>\n
In the Philippines, for example, projects might not
\nnecessarily generate income but contributed to poverty
\neradication -- the bank's key goal, he told AFP.<\/p>\n
Crouch said the ADB was considering financing several projects
\nin the agriculture, social and finance sectors in the Philippines
\nthis year, including in the troubled and poverty-stricken
\nsouthern Mindanao area.<\/p>\n
\"The projects we are hoping for in the Philippines include a
\nnon-bank financial governance program, like involving bond
\ntrading and micro-finance, as well as in education and water
\nresources,\" he said.<\/p>\n
Last year, the bank allocated $40 million dollars in project
\nloans in the Philippines and supported reforms in the country's
\nkey power sector through a partial credit guarantee for a $500-
\nmillion bond issue.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/adb-raises-share-of-project-funding-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}